It’s official! May 2019 was the first month to see stronger year-over-year sales after 15 months of slower sales. With 509 sales compared to 504 last year, we’re up 1%! May is also up 20% over April. The Kelowna and Central Okanagan Valley real estate market is continuing to prove this place is pin on the map that people want to call home. Overall the market shows to be relatively balanced, however, if you look closely you’ll see that in reality there are two divergent sub-markets; one is a buyer’s market and the other a seller’s market.
Leading the charge in sales was single family detached homes with 240 sales last month, right on par with May 2018’s 240 closed transactions and townhouses with 96 sales last month, up a very significant 31.5% from May of 2018’s 73 closed transactions. Sales figures for both of these segments also represent solid month-over-month increases as well. Let’s peel back another layer. Townhouses are doing so well because they offer affordability. In an effort to attain homeownership, young families and retirees alike are forgoing large private yards for stratified townhouses that require less individual maintenance and allow them to maintain an adequate quality and modernity on an increasingly constrained budget. But what about single family homes? Doesn’t it cost a million dollars to buy a home in Kelowna? The average single family detached home in Kelowna does cost nearly $700,000. However, 63% of single family residential homes sold in Kelowna and area last month were priced at below $700,000. In comparison, homes of this price made up only 53% of sales in May of 2018. This makes it clear in what price range today’s buyers are shopping.
Central Okanagan Avg. Selling Price for Past 12 Months by Market Segment
Inventory continued to edge upwards. We typically see inventory reach its annual peak in either June or July with only a couple exceptions in the past decade; in 2016 inventory peaked in May and last year inventory peaked in August. If sales activity continues to strengthen over last year and we reach an inventory peak next month, the autumn season could shape up to be yet another interesting time to sell. Only time will tell. For right now, even with a historically high level of inventory, overall the market is balanced with 5.59 months of inventory making May the 5th consecutive month this year we’ve seen supply increasing slower than sales are increasing. As I mentioned in the first paragraph, however, there are two divergent sub-markets. The seller’s market or near seller’s market is where buyers are finding affordability. Starting with townhouses which show 4.66 months of inventory - a figure we haven’t seen since last June. Then there are those single family residential homes in the lower price category. Specifically, the under $600,000 price category saw 89 sales in May and even with 330 homes currently listed for sale there is only 3.71 months of inventory. It’s not Spring 2017, but in reality it’s preferable because it’s a great environment for sellers while giving buyers often a few days instead of a few hours to make decision on writing an offer.
In contrast, there is a buyer’s market to be found in the $900,000 and up price category. Here we saw 43 sales in May but with 655 active listings there is 15.23 months of inventory. For reference, looking back at Spring 2017 again, sales in this price category are now roughly 40% lower meanwhile inventory has increased by more than 50%. So if you’re looking for a million dollar plus home in Kelowna, you have a lot to look at and if you’re selling in this category you need to make sure you’re being realistic and that overall you are dialed in. If you are serious about selling you need to price accurately for today’s market and your home and marketing should stand out from the rest.
The average valuation of residential properties was flat month-over-month and is down only 1.5% from this time last year, sitting at $573,926. Single family detached had the least amount of movement while the condo segment dropped down with an influx of lower priced condos being sold compared to last month that saw numerous higher priced condos selling. Townhouses experience that largest increase in valuation but in terms of a longer-term trend, it continues to be relatively flat. Valuation across segments is making for good conditions for buyers and sellers. When pricing is moving quickly, whether increasing or dropping, it presents us with a challenge; it heightens the importance for sellers of not selling for too little and for buyers of not paying too much. There is also the added stress that if you don’t get a deal done in the present, the near future could mean selling for less or paying a lot more. With stability in valuation, buyers and sellers can make more rational decisions with less stress and can really focus on doing what’s right for them and their family in the moment.
For single family homes, nearly all neighbourhoods are again experiencing either a seller’s market or balanced market. There are a few neighbourhoods that are standing out right now as very quick moving:
Smith Creek: 2.6 MOI (currently 13 homes for sale)
Rose Valley (West Kelowna Estates): 2.82 MOI (currently 51 homes for sale)
Dilworth Mountain: 3.0 MOI (currently 21 homes for sale)
Central City: 3.86 MOI (currently 27 homes for sale)
On the other end of the spectrum, there are still neighbourhoods that are experiencing buyer’s markets, albeit they have moved towards being more balanced since last month:
Lower Mission: 13.13 MOI (currently 105 homes for sale, inventory is up +17, MOI is down from 22)
Black Mountain: 9.67 MOI (currently 58 homes for sale, inventory is up +3, MOI is down from 13.25)
Southeast Kelowna: 10.5 MOI (currently 63 homes for sale, inventory is up +3, MOI no change)
Lakeview Heights: 9.07 MOI (currently 136 homes for sale, inventory is up +18, MOI no change)
MAY 2019 - Months of Inventory by Neighbourhood
All data is from OMREB/MLS® System. Interpretations of the data is done with the utmost care and attention, however, errors and omissions may apply. Selling and purchasing real estate comes with risk and should be discussed in depth with your real estate agent of choice.